Sonny ---the NT disaster -a little silver lining ----By the way we are in a recession no matter what the FED says :
Layoffs are sweet justice to some
By Thom Calandra, FT MarketWatch.com
Last Update: 4:43 AM ET Feb 16, 2001
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LONDON (FTMW) - The technology exodus - layoffs, abrupt resignations and rapid capital outflows - doesn't want to end.
A stampede away from anything tethered to a computer network may lead executives, workers and investors to the realization that it's time to turn the page. When an elephant like Nortel Networks (NT: news, msgs) says it's cutting 10,000 jobs out of about 100,000, it proves that even the fat-cats see the writing on the wall and are changing their behaviour.
This is all good. Every crisis needs a climax. Nortel, a Canadian company that makes the equipment used to stuff fibre optics down the throats of public and private networks, says the American downturn is "faster, deeper and more severe" than most people were counting on.
Job cuts usually follow the loss of investor interest in technology. This time around is no different. The capital markets were eight months ahead of the jobs-slashing CEOs, CFOs and controllers. Executives, having seen their pallid investment bankers abandon ship, are reluctantly playing catch-up.
Few industries are immune from layoffs. It's happening to the folks who make the boxes, Dell Computer. It's happening to the folks who tell us about the folks who make the boxes: media company CNBC. Oh, and it's happening to the folks who sell the clothes to the engineers and working stiffs who are getting laid off: JC Penney, Sears, Montgomery Ward.
Among American telecom and tech equipment companies, Lucent, WorldCom, Motorola and Nortel have led the jobs stampede. Clearly, these are the elephants that in another day and age would be tired-old phone companies, relying on stale coffee and dank cafeterias to get their workers through the day.
In this day and age, though, the telecom companies were the great stock-market hopes of 1999 and 2000. Their CEOs, now reeling, were then flawless. Their silk-suited bankers were raising tens of billions via the bond, stock and swap markets.
Turns out, these companies were just as tired and old as Ma Bell, and the bankers knew it all along. But hey, you have to raise cash when you can, not when you deserve to.
To be sure, the American manufacturers' layoffs - the General Electrics and Honeywells of the world - dwarf those in the telecom, Internet and media arenas. That's bad for everyone in the blue-collar world of Sears and JC Penney.
Predictions: America's job cuts will spread overseas. Industries once thought to be buffered from slowdowns, like the international drug-makers and biomedical developers, will add to the pink-slip lists. So will the semiconductor makers, who thus far have been strangely absent from the roll call of jobs-slashing CEOs.
Plus, what goes around comes around. The layoffs that will give the manufacturing, technology and telecom CEOs and controllers a bittersweet satisfaction will come from the investment banking units of the Wall Street banks. Sweet justice, if ever there was any.
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